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22 Feb, 2024 16:46

India opens up space sector to foreign firms

New Delhi is hoping to reel in investors to set up local manufacturing
India opens up space sector to foreign firms

India has eased restrictions on foreign direct investment (FDI) in its space sector, in a bid to attract global players and expand critical capabilities, the government said on Wednesday.

Previously, FDI for satellite operations was only permitted with specific government approval.

Under the amended policy, New Delhi is allowing up to 100% investment in the manufacture of components and systems for satellites without official permission. For building satellites in India, foreign companies can invest up to 74%, or 49% for launch vehicles, without special authorization, the statement said.

Increased private sector participation would generate employment and make the sector “self-reliant”, the Indian government stressed. New Delhi also hopes to encourage foreign entities to set up manufacturing units within the country and integrate Indian companies into “global value chains.” The measures follow discussions between India’s Department of Space, government agencies, and industry leaders in the sector.

India’s space program has seen a rapid advance in recent years, with the landing of a first ever probe on the Moon’s South Pole, and the country’s first observation mission orbiting the Sun.

Recently, Sreedhara Panicker Somanath, the head of Indian Space Research Organisation (ISRO), said India is planning to launch layers of satellites in different orbits to track the movement of troops and photograph thousands of kilometers along the borders with China and Pakistan. New Delhi has already configured 50 more satellites for developing geo-intelligence capability, and intends to launch them within the next five years.

In another development, India has also reportedly shipped its first surveillance satellite designed by a private player, the defense arm of Tata conglomerate, to the US – where it will be launched into orbit from Florida on a SpaceX rocket later this year.

India’s space industry players expect the government’s liberalization move to attract up to $5 billion in investment in satellite manufacturing, launch vehicles, ground segment solutions, and associated services over the next five years, the Business Standard newspaper has reported.

According to the Indian National Space Promotion and Authorisation Centre, a part of ISRO, the Indian space economy is likely to grow from around $8.4 billion in 2023 to $44 billion by 2033.

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